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FTC sues Amazon, accusing the e-commerce giant of misleading advertisers
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The Federal Trade Commission on Monday sued Amazon, alleging the e-commerce giant "secretly and systematically overcharged" advertisers on its platform by manipulating its pricing and auction systems.
Key facts
- The company said its auction systems have saved advertisers $8 billion between 2021 and 2025, not cost them extra
- The lawsuit, which was joined by 22 state attorneys general, argues that Amazon may have reaped more than $20 billion from advertisers by using "hidden surcharges" dating back to a change
- Amazon has millions of advertising customers who were misled into paying significantly higher prices," FTC Chairman Andrew Ferguson said in a statement
- The FTC alleges in its complaint that Amazon in 2019 changed its auction rules without notice by adding an undisclosed surcharge it referred to as a "soft reserve price," which led to higher ad prices
Summary
The lawsuit, which was joined by 22 state attorneys general, argues that Amazon may have reaped more than $20 billion from advertisers by using "hidden surcharges" dating back to a change to its auction rules that took effect in 2019. "Amazon has millions of advertising customers who were misled into paying significantly higher prices," FTC Chairman Andrew Ferguson said in a statement. Amazon called the FTC's lawsuit "misguided" and said the complaint "fundamentally misunderstands how advertisers operate. "They've provided advertisers with guidance about their auctions and pricing in the main tools they use to manage their campaigns, and they continue to update that guidance," the company said.